The head of the Federal Reserve Jerome Powell will testify on the Semiannual Monetary Policy Report on Tuesday and Wednesday
Evergreen buck keeps to 5-month maximum
On Thursday, the evergreen buck kept to the maximum of five months versus the group of other leading currencies due to the surge of the revenue of American government bonds. The common currency traded below the 1.18 level amid worries about the political situation in Italy.
The US dollar index, displaying the purchasing power of the greenback against six leading currencies, came up with 93.28, staying close to the maximum of five months - 93.52 that was recorded on Wednesday. Since the beginning of this week, the US dollar index has edged down by approximately 0.93%.
The recent appreciation of the US currency can be explained by a jump in the yield of US bonds to a multi-year maximum.
During night trading, the revenue of 10-year US government bonds tacked on to 3,117%, which is the highest outcome since 2011. The profitability of bonds appears to be inversely proportional to their value.
Surge in the yield of American Treasury bonds has been observed since the Federal Reserve announced in May that inflation is approaching the objective of 2%.
The US key financial institution lifted the interest rate in March and gave a forecast for two more hikes this year. However, many investors are assured that there will be three such lifts.
The common currency remained under pressure: by the time of writing. As a matter of fact, the currency pair EUR/USD showed 1.1793 after Wednesday's dive to 1.1762, which is the lowest value since December 19.
Demand for the European currency dived due to worries about the formation of a government coalition in Italy. Market participants are afraid that changes in the country can provoke its exit from the euro area.
The greenback soared against the Japanese yen. The currency pair USD/JPY leapt by 0.18%, hitting 110.59, which is the highest value since January 23.
The United States will publish the non-farm employment change, also known as non-farm payrolls (NFP) at 15:30 MT time on February 7.
The level of non-manufacturing PMI for the United States by the Institute of Supply Management will be published at 17:00 MT time on February 5.
The Federal Open Market Committee will publish its meeting minutes on February 19, at 21:00 MT time.
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